Francesca's Earnings: An Early Look

Earnings season is winding down, with most companies already having reported their quarterly results. But there are still some companies left to report, and Francesca's Holdings (NASDAQ: FRAN  ) is about to release its quarterly earnings. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

The retail space is a crowded one, with every player seeking out its own niche. For Francesca's, the company's retail boutiques combine apparel, jewelry, and accessories under one roof. But is that enough to distinguish the company from its many rivals? Let's take an early look at what's been happening with Francesca's Holdings over the past quarter and what we're likely to see in its quarterly report on Tuesday.

Stats on Francesca's Holdings

Analyst EPS Estimate

$0.30

Change From Year-Ago EPS

50%

Revenue Estimate

$84.9 million

Change From Year-Ago Revenue

38%

Earnings Beats in Past 4 Quarters

4

Source: Yahoo! Finance.

Will Francesca's Holdings keep its earnings-beat streak alive this quarter?
Analysts have pushed up their views on Francesca's slightly in recent months, adding $0.02 per share both to their earnings consensus for the just-ended holiday quarter and to their fiscal 2014 views. The stock has climbed as well, rising about 11% since mid-December.

Francesca's gave investors reason to celebrate a bit early this quarter, as it boosted its guidance even before the quarter finished. Back in mid-January, Francesca's said that sales during the holidays had been slightly stronger than it had initially projected, leading it to push its sales and income estimates slightly higher, in line with what analysts now expect.

So far, Francesca's has done a spectacular job of building growth in the often-fickle young-adult retail segment. Upscale retailers Michael Kors (NYSE: KORS  ) and Coach (NYSE: COH  ) were among the first to discover the value of including accessories and jewelry among their collections, but Francesca's has used the same strategy in its own niche with impressive results. Moreover, Francesca's commitment to bringing new merchandise to its stores on a weekly or even daily basis inspires repeat visits, helping produce the amazing same-store sales the company has posted.

In Francesca's quarterly report, watch closely at how CEO Neill Davis continues to expand on his own vision for the company going forward. With Davis having taken over the reins from former CEO John De Meritt last fall, Francesca's needs to establish its continuing ability to grow quickly in order to justify its relatively high current valuation.

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